NBCC IPO sails through

The Government owned National Building Construction Corporation's (NBCC) initial public offer (IPO) was oversubscribed 4.82 times. The IPO which opened for subscription on March 22, 2012, closed on March 27, 2012.

The Qualified Institutional Buyers (QIBs) portion was oversubscribed 7.07 times, while the retail individual portion was over subscribed 3.40 times. The non institutional segment saw an oversubscription of 1.70 times.

The government till now has raised Rs 14,000 crore through stake dilution, for the current year, despite setting a higher divestment target. The government has plans to sell a 10% stake in the company. The price band was in the range of Rs 90-106 per share.

Analysts believe that the pricing if one considers the upper price band of Rs 108 is attractive, if one compares the price to earnings multiple of larger players. In fact, players like DLF and Unitech are traded at very rich P/E multiples and have staggering debts on their books.

Hence, a debt free real estate player like NBCC looks far attractive even at the upper price band. The government's thrust on infrastructure should also augur well for the company to sustain order flows.

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